The ESM commenced its operations at a meeting on 8 October However, the last of the 27 European Union member states to ratify the amendment, the Czech Republic , did not do so until 23 April , resulting in its entry into force on 1 May Following the onset of the European sovereign debt crisis , there was a drive to reform the functioning of the eurozone in the event of a crisis. These, together with the International Monetary Fund , would lend money to EU states in trouble, in the same way that the European Central Bank can lend money to European banks. However, the EFSF was only intended to be a temporary measure, in part due to the lack of a legal basis in the EU treaties. In particular, EFSM funding was granted under Article of the TFEU, which stipulates that only states facing "severe difficulties caused by natural disasters or exceptional occurrences beyond its control" were eligible.
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Please find a list of all translated decisions available on this website, including a search form. German Bundestag, represented by its President Prof. Federal Government, represented by the Federal Chancellor Dr. The Organstreit proceedings [proceedings relating to disputes between constitutional organs] and the constitutional complaints challenge German and European legislation dealing with the establishment of the European Stability Mechanism and the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, measures of the European Central Bank, and, in this context, certain omissions of the federal legislature and the Federal Government.
On 28 November , the finance ministers of the Member States of the euro currency area agreed on its general characteristics. On 25 March , the European Council adopted the final draft of a future Art. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality. On 21 July , the heads of state and government of the euro currency area agreed to furnish the European Financial Stability Facility and the future European Stability Mechanism ESM with further instruments.
The corresponding renegotiations of the Treaty were completed on 2 February by signing the — second — draft of the Treaty establishing the European Stability Mechanism cf. If it is considered indispensable to safeguard the financial stability of the euro area as a whole and of its Member States, the ESM may provide stability support to an ESM Member subject to strict conditionality, appropriate to the financial assistance instrument chosen Art.
With regard to the procedure, Art. On the basis of the request and the assessment, the Board of Governors cf. If the decision is positive, the European Commission — in liaison with the European Central Bank and, wherever possible, together with the International Monetary Fund — negotiates with the ESM Member concerned a memorandum of understanding MoU detailing the conditionality attached to the financial assistance facility.
The European Commission — in liaison with the European Central Bank and, wherever possible, together with the International Monetary Fund — is entrusted with monitoring compliance with the economic conditionality attached to the financial assistance facility.
The provisions relevant to the present proceedings are as follows cf. BGBl II p. The purpose of the ESM shall be to mobilise funding and provide stability support under strict conditionality, appropriate to the financial assistance instrument chosen, to the benefit of ESM Members which are experiencing, or are threatened by, severe financing problems, if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States.
For this purpose, the ESM shall be entitled to raise funds by issuing financial instruments or by entering into financial or other agreements or arrangements with ESM Members, financial institutions or other third parties. The voting thresholds shall be recalculated accordingly.
Decisions to be taken on the basis of powers delegated by the Board of Governors shall be adopted in accordance with the relevant voting rules set in Article 5 6 and 7. Whilst holding office, the Managing Director may not be a Governor or Director or an alternate of either. Shares of authorised capital stock initially subscribed shall be issued at par.
Other shares shall be issued at par, unless the Board of Governors decides to issue them in special circumstances on other terms. They shall meet all capital calls on a timely basis in accordance with the terms set out in this Treaty.
The obligations of ESM Members to contribute to the authorised capital stock in accordance with this Treaty are not affected if any such ESM Member becomes eligible for, or is receiving, financial assistance from the ESM.
When a potential shortfall in ESM funds is detected, the Managing Director shall make such capital call s as soon as possible with a view to ensuring that the ESM shall have sufficient funds to meet payments due to creditors in full on their due date. ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them by the Managing Director pursuant to this paragraph, such demand to be paid within seven days of receipt.
It may decide to change the authorised capital stock and amend Article 8 and Annex II accordingly. Such decision shall enter into force after the ESM Members have notified the Depositary of the completion of their applicable national procedures.
Such conditionality may range from a macro-economic adjustment programme to continuous respect of pre-established eligibility conditions. The Board of Governors shall decide an appropriate course of action for ensuring that the ESM Member concerned settles its debt to the ESM within a reasonable period of time. The Board of Governors shall be entitled to require the payment of default interest on the overdue amount. The Members or former Members of the Board of Governors and of the Board of Directors and any other persons who work or have worked for or in connection with the ESM shall not disclose information that is subject to professional secrecy.
They shall be required, even after their duties have ceased, not to disclose information of the kind covered by the obligation of professional secrecy. The votes of the member s of the Board of Governors of the ESM Member s concerned shall be suspended when the Board of Governors votes on such decision and the voting threshold needed for the adoption of that decision shall be recalculated accordingly. The judgement of the Court of Justice of the European Union shall be binding on the parties in the procedure, which shall take the necessary measures to comply with the judgment within a period to be decided by said Court.
This Treaty shall be open for accession by other Member States of the European Union in accordance with Article 2 upon application for membership that any such Member State of the European Union shall file with the ESM after the adoption by the Council of the European Union of the decision to abrogate its derogation from adopting the euro in accordance with Article 2 TFEU.
The Board of Governors shall approve the application for accession of the new ESM Member and the detailed technical terms related thereto, as well as the adaptations to be made to this Treaty as a direct consequence of the accession. Following the approval of the application for membership by the Board of Governors, new ESM Members shall accede upon the deposit of the instruments of accession with the Depositary, who shall notify other ESM Members thereof.
The Treaty establishing the European Stability Mechanism does not contain an explicit right of resignation or termination. It shall not encroach upon the competence of the Union to act in the area of the economic union. The Contracting Parties shall ensure rapid convergence towards their respective medium-term objective. The time-frame for such convergence will be proposed by the European Commission taking into consideration country-specific sustainability risks.
Progress towards, and respect of, the medium-term objective shall be evaluated on the basis of an overall assessment with the structural balance as a reference, including an analysis of expenditure net of discretionary revenue measures, in line with the revised Stability and Growth Pact;.
The mechanism shall include the obligation of the Contracting Party concerned to implement measures to correct the deviations over a defined period of time. The Contracting Parties shall put in place at national level the correction mechanism referred to in paragraph 1 e on the basis of common principles to be proposed by the European Commission, concerning in particular the nature, size and time-frame of the corrective action to be undertaken, also in the case of exceptional circumstances, and the role and independence of the institutions responsible at national level for monitoring compliance with the rules set out in paragraph 1.
Such correction mechanism shall fully respect the prerogatives of national parliaments. The existence of an excessive deficit due to the breach of the debt criterion will be decided in accordance with the procedure set out in Article of the Treaty on the Functioning of the European Union.
The content and format of such programmes shall be defined in European Union law. Their submission to the Council of the European Union and to the European Commission for endorsement and their monitoring will take place within the context of the existing surveillance procedures under the Stability and Growth Pact.
While fully respecting the procedural requirements of the Treaties on which the European Union is founded, the Contracting Parties whose currency is the euro commit to supporting the proposals or recommendations submitted by the European Commission where it considers that a Member State of the European Union whose currency is the euro is in breach of the deficit criterion in the framework of an excessive deficit procedure. This obligation shall not apply where it is established among the Contracting Parties whose currency is the euro that a qualified majority of them, calculated by analogy with the relevant provisions of the Treaties on which the European Union is founded, without taking into account the position of the Contracting Party concerned, is opposed to the decision proposed or recommended.
If the European Commission, after having given the Contracting Party concerned the opportunity to submit its observations, concludes in its report that such Contracting Party has failed to comply with Article 3 2 , the matter will be brought to the Court of Justice of the European Union by one or more Contracting Parties. In both cases, the judgment of the Court of Justice shall be binding on the parties to the proceedings, which shall take the necessary measures to comply with the judgment within a period to be decided by the Court of Justice.
If the Court of Justice finds that the Contracting Party concerned has not complied with its judgment, it may impose on it a lump sum or a penalty payment appropriate in the circumstances and that shall not exceed 0.
The amounts imposed on a Contracting Party whose currency is the euro shall be payable to the European Stability Mechanism. In other cases, payments shall be made to the general budget of the European Union. Within five years, at most, of the date of entry into force of this Treaty, on the basis of an assessment of the experience with its implementation, the necessary steps shall be taken, in accordance with the Treaty on the European Union and the Treaty on the Functioning of the European Union, with the aim of incorporating the substance of this Treaty into the legal framework of the European Union.
The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union contains no explicit right of termination or resignation either. According to the explanatory statement, the rights of participation were to be designed in the course of the parliamentary proceedings.
Haushaltsausschuss des Deutschen Bundestages, Ausschussdrucksache In this version, the draft bill was the subject of a public hearing on 7 May cf. Acquisition of the German share of the capital stock of the European Stability Mechanism; changing the consolidated lending volume of the European Stability Mechanism and of the European Financial Stability Facility.
Payments on the callable capital are to be made with the means of the federal budget. Requirement of parliamentary approval for decisions in the European Financial Stability Mechanism. The overall budgetary responsibility is affected in particular. Without such a decision of the plenary, the German representative must vote against the proposed resolution. The representative of the Federal Government must participate in the passing of the resolution. Participation of the budget committee of the German Bundestag.
The budget committee shall supervise the preparation and enforcement of the agreements on stability support. Decisions on the provision of additional instruments without changing the total financing volume of an existing financial assistance facility or material changes of the conditionality of the financial assistance facility,.
In these cases, the Federal Government may through its representative only vote in favour of, or abstain from voting on, a resolution proposal on matters of the European Stability Mechanism when the budget committee has passed a decision in favour of this.
The Federal Government may also make an application to this effect in the budget committee. Without such a decision of the budget committee, the German representative must vote against the proposed resolution. This applies in particular to resolutions on the disbursement of individual tranches of the stability support granted. Particular confidentiality exists where the mere fact of consultation or passing of a resolution must be kept secret in order not to thwart the success of the measures.
The Federal Government must give reasons for the assumption of particular confidentiality. It shall give the German Bundestag an opportunity to express an opinion in matters which affect its competencies and shall take account of its opinions.
It shall also communicate these documents to the Bundesrat. By judgment of 27 November , the Court of Justice of the European Union decided that there were no concerns against the amendment of Art.
I, n. On 15 and 24 March , the euro group agreed on the basics of an assistance programme for the Republic of Cyprus. The Board of Governors of the European Stability Mechanism decided on 24 April to grant, in principle, to the Republic of Cyprus stability support in the form of a financial assistance facility Art. Pursuant to the text of the treaty and its conclusions, it aims to strengthen the economic pillar of the monetary union, to achieve a new quality of economic policy coordination between the Member States of the euro currency area, to improve their competitiveness, and thereby to achieve a higher degree of convergence.
The focus is to be placed primarily on the policy areas that fall within the competences of the Member States and which are crucial for increasing competitiveness and avoiding harmful imbalances cf. Furthermore, the European Union has also passed six acts of secondary legislation in November the so-called Six-pack :.
These provisions concern in particular the option that, in case of excessive imbalances, European Union institutions issue recommendations and thus influence the Member State concerned. In the course of the financial and sovereign debt crisis, particularly in the years and , the Governing Council of the European Central Bank has repeatedly lowered the credit quality requirements of securities eligible as collateral for central bank lending cf.
ECB press release of 8 December , online at www. With the TARGET2 system, the European System of Central Banks operates a cross-border payment system, which most central banks of the Member States of the European Union and more than 4, commercial banks use for carrying out their payment transactions.
By judgment of 12 September , the Senate rejected the applications of complainants I. The representatives of the parties to the Treaty establishing the European Stability Mechanism ESM signed on 2 February , meeting in Brussels on 26 September , agree on the following interpretative declaration:.
Article 32 5 , Article 34 and Article 35 1 of the Treaty do not prevent providing comprehensive information to the national parliaments, as foreseen by national regulation. The above mentioned elements constitute an essential basis for the consent of the contracting States to be bound by the provisions of the Treaty. The Federal Republic of Germany refers to the declaration made by the parties to the Treaty of 2 February establishing the European Stability Mechanism and submitted by Cyprus in their name by Note Verbale of 27 September to the Council Secretariat as depositary, which reads as follows:.
The Federal Republic of Germany hereby confirms and explicitly repeats this declaration, which it issued jointly with the other parties to the Treaty. On 26 September , the Senate rejected the adoption of an enforcement order which complainant I. By order of 17 December , the Senate separated the proceedings in so far as complainants I. In essence, complainants I.
Treaty Establishing the European Stability Mechanism